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What Is Warehouse Management System & How It Works?

warehouse management system

Warehouse management system WMS is known primarily as software and a set of pre-defined processes that enable organizations to authorize and supervise warehouse operations. This course of action happens from the arrival of goods or materials into the warehouse toil the time they are given the clearance to move out. This entire process of warehouse management includes inventory management, auditing, and picking processes. To understand what a warehouse management definition stands for, let’s clarify by stating an example.  

To gain maximum visibility into an organization’s inventory in its respective time and location (facility or in transit), the warehouse management system WMS is the chief action to execute. Talking about the warehouse management process, it goes through managing supply chain operations and different types of warehouses that initiate from either wholesaler or the manufacturer to the warehouse. After that, it moves to a distribution centre or a retailer.

Bifurcation of Warehouse Management Systems in Brief

Warehouse management systems can be segmented into multiple variations and implementation methods. Each of the types is distinctive in its size and the nature of the organization it belongs to. These can be independent modules or simply stand-alone systems in large WMS enterprise resource planning (ERP) system. These systems can also differ from each other based on complexities. Unlike small enterprises that normally work on a simple series of hard copy spreadsheet files or documents, large enterprises use complex WMS software. 

Bifurcation of the warehouse management system

Few of the warehouse management systems are designed in accordance with the size and stature of the organization. In other ones, the consideration parameters include other elements. Vendors use different versions of WMS products that can be scaled to various organizational sizes. In a few of the cases, few organizations have considered building a WMS from scratch while it is advised to implement a WMS from a reputed vendor.

Since a warehouse management system can be configured for a respective organization according to the specific requirements they want, vendors can add customizations effectively. For an eCommerce, the customizations added to its respective WMS will be varied from a brick-and-mortar retailer. Likewise, designs and configurations can be different based on goods the organization gives out to sell for e.g grocery chain WMS will be strikingly different from a sporting goods retailer. 

A warehouse management system has its own specific and devoted way of working and differs majorly from traditional warehouse operations. Here are detailed pointers on how a warehouse management system work and what does it includes:

Shipping & Receiving 

Being a warehouse at its core stage of existence, it is identified majorly as a place where goods are stored. A primary action under a warehouse management system would be tracking the goods that are coming into the warehouse. Each of the goods that are being received needs to be updated in the system and tracked with their time of arrival and the location from which it has been sent. The sub-part of this action includes tracking the goods that are going out for shipping. The number of goods received and the number of goods dispersed for shipping needs to be minutely tracked, measured and recorded in the system.

Inventory Management Systems 

An inventory management system is a term that is closely related to the warehouse management system but does not mean the same and is often been considered and confused as a result. An inventory management system is authorized for controlling inventories of the same warehouse and can use the same functions that are currently in operation.

For example, it can use actions like barcoding and space tracking. However, to spot the difference between an inventory management system (IMS) and a WMS, is that, the former can be a part of the latter one, but the vice versa is not possible.

Kitting and Pick Orders

Services in a warehouse sometimes stretch beyond simply storing goods and many significant actions need to be considered as part of its working systems. Parts or series of goods with their own designated storage keeping units are kitted together to formulate a new set of storage keeping units. When WMS is the kernel factor here, order management and fulfilment play a pivotal role in the creation and tracking of tracking pick and pack orders.

Warehouse Staff Management 

Warehouse staff management can be considered to be a primary action in the warehouse management system since it is counted amongst the influencing factors that affect the costs of managing a warehouse. If the warehouse staff management can be effectively monitored and checked, it can lead to a broader understanding of the performances of eh people working in the warehouse. This in-return will improvise on processes dealt with, along with the significant reduction of overall costs.  


Reporting comes as a vital point in any business; when it comes to warehousing, real-time reporting can be a boosting factor. With the digitalization of business operations, through comprehensive reporting as a feature of digital WMS, a lot of insights can help to improvise on current processes. Now, warehouse managers are competent to see and monitor a lot of data that is generated in the form of charts and graphs. These insights directly influence in making informed decisions about how effectively the warehouse can be managed to keep all factors on a prospective note.

Now the actions of an effective warehouse management system being detailed above, it is necessary to understand what steps are involved in the same and what actions are designated for it. 

Steps Involved in the Functioning of Warehouse Management System

Stage 1: Expectations and Motivations

The first stage to get started with a warehouse management system is the involvement of varying sets of expectations and motivations collected from the various stakeholders’ perspectives. With the heightened expectations of speedy ROI and smooth implementation of WMS, company Directors and Operations / Logistics Managers expect maximum user-friendliness that accelerates job ease.

It also focuses on eradicating inefficient processes, along with eliminating bad warehouse practices and habits. As a result of having a WMS, warehouse staff looks forward to making their jobs easier with minimal errors recorded. However, at the same time, the automated version of WMS would not be threatening to their designated jobs. If the warehouse management system provider clarifies the potentials it would bring into warehouse operations clearly without the threat of job slack, the implementation of WMS can seriously ring a significant boost in the revenue.

Stage 2: Risk Reduction 

Since the reduction of risks is a pivotal factor in warehouse management system implementation, the core objective stands out to be an assessment of potential risks that might arise once the implementation is active and thus chalking out measures to either minimize or negate them completely. The more competent and experienced will be the client and the WMS provider, the less will be the probability of getting prone to further risks.

Stage 3: Business review

Business review sessions initiate at the beginning of the warehouse management system project. This enables the organization to assess, dissect and analyze the current ongoing set of warehouse functions. This also allows meeting the needs and requirements of the warehouse.

Stage 4: Implementation schedule

One of the biggest challenges that are met to implement a warehouse management system is the lack of scheduling properly. As per various surveys conducted, this challenge stands out as a reason for any kind of potential risks detected. As a result of unexpected obstacles and improper planning, a WMS implementation seems to fall out. Thus, only a realistic implementation plan allows you to schedule a successful WMS implementation. 

Stage 5: Team Building

On a general basis, two teams are to be involved in WMS implementation; the team who would be installing the system and the other team would be including client warehouse executives. At this stage, picking the right team is very elementary and can directly be the influencing factor for either the successor the failure of the WMS implementation. This is due to the actions executed will be influenced by communication flow between both the teams and the chemistry involved in it will decide for its own in the success of a WMS installation.

Stage 6: Design and Customization

Since the business review (afore-mentioned stage) is very important to the warehouse management system installation project, the same needs to be effectively customized to meet the client’s requirements. With more flexibility in the WMS, lesser customization is required.

Speaking from a perspective where making WMS project successful in the least possible time taken, minimizing customization can be a key factor. Even though the basic utility of WMS is to meet the industry standards, changes can be implemented in the ways a warehouse operates. Therefore, both the expectations and risks should be accordingly addressed. 

Stage 7: Training. 

Training is a part of any new technology implementation; as in consideration of a WMS being in operation, training is very critical for the application of future design and feature customizations. This also becomes important while the transition from a respective warehouse management system to another. Some WMS companies consider that training given on WMS operation can be a time-taking affair and negates its necessity.

However, it is highly advisable that a roper WMS training must be provided to each staff for complimenting the aptitude and compatibility of the users to handle the newly integrated system.

Stage 8: Data

This stage deals directly with the implementation of the warehouse engagement system. It includes the transferring procedure of warehouse data from one system to another. To understand this stage with more clarity, it suggests that the database that contains the existing data about the warehouse needs to update as per the newly integrated data scheme and terminology. Also with this, the addition of missing data and modified data needs to be done and adjusted with the new system requirements.

Find out how to Use Big Data in Freight Transportation.

Stage 9: Testing. 

Testing is done majorly on real warehouse data. This included the comparison of results of warehouse process execution that existed earlier before WMS installation and the pone that has been newly generated and integrated. Multiple warehousing systems are tested minutely and the bugs located in the design frame are corrected by the respective warehouse management system supplier or the WMS provider implementation team.

Stage 10: Deployment

Once the testing is being done and the modifications are added to the new system, the next immediate step is the deployment. A date is fixed and a close accurate data snap of the warehouse data is being uploaded to the database of the new WMS. As a course of action, the main work commences in the newly integrated warehouse management system. Although the new WMS stays in operation yet at times for data accuracy ensuring tasks, both the systems (existing and current) can be compared and evaluated.

Stage 11: Support

Due to a newly integrated system that has been implemented in warehouse management; it brings out many challenges that were not properly addressed while it was being dealt with at the implementation stages. The main reason why support is an integral part of a successful project was that the later stages’ complexities will demand quick resolutions.

While in its full fledge operation stage, resolving resolution can unnecessarily take a lot of time thereby delaying the immediate actions that need tsp be taken. Few of the large enterprises having a robust warehouse management system uses a cloud-based warehouse management system and works on the SaaS model (Software as a Service). For such enterprises, operations become super smooth with a minimal or negligible amount of errors located.


Thus, with such a detailed explanation of what is a warehouse management system and what potential power it holds once being successfully installed, the emergence of having it implemented for your warehouse operations becomes extremely essential. Each stage in its implementation procedure is extremely vital and needs to be followed with full attention and skilful supervision.

In today’s date, where competition has been so crushingly high, the necessity to stand out with cutting-edge technology is what you need to be updated with at the earliest. Although the warehouse management system has a lot of added advantages, yet the reduction of costs and seamless operations are two of its major highlights. Thus, get started with an advanced warehouse management system today.

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